Metro-Goldwyn-Mayer Studios Inc. (initialized as MGM; often referred to as Metro; common metonym: the Lion or Leo)[2] is an American media company, involved primarily in the production and distribution of feature films and television programs. One of the world's oldest film studios, MGM's headquarters are located at 245 North Beverly Drive in Beverly Hills, California.[3]

Overview

This section needs to be updated. Please update this article to reflect recent events or newly available information.(August 2014)

MGM was the last studio to convert to sound pictures, but in spite of this fact, from the end of the silent film era through the late 1950s, Metro-Goldwyn-Mayer was the dominant motion picture studio in Hollywood.[17][page needed][18][page needed] Always slow to respond to the changing legal, economic, and demographic nature of the motion picture industry during the 1950s and 1960s,[19][page needed][20][page needed][21][page needed] and although at times its films did well at the box office, the studio lost significant amounts of money throughout the 1960s.[20][21] In 1966, MGM was sold to Canadian investor Edgar Bronfman Sr., whose son Edgar Jr. would later buy Universal Studios.[citation needed] Three years later, an increasingly unprofitable MGM was bought by Kirk Kerkorian, who slashed staff and production costs, forced the studio to produce low-budget fare, and then shut down theatrical distribution in 1973.[21] The studio continued to produce five to six films a year that were released through other studios, mostly United Artists. Kerkorian did, however, commit to increased production and an expanded film library when he bought United Artists in 1981.[citation needed]

MGM ramped up internal production, as well as keeping production going at UA, which included the lucrative James Bond film franchise.[22][page needed] It also incurred significant amounts of debt to increase production.[23][page needed] The studio took on additional debt as a series of owners took charge in the 1980s and early 1990s. In 1986, Ted Turner bought MGM, but a few months later, sold the company back to Kerkorian to recoup massive debt, while keeping the library assets for himself. The series of deals left MGM even more heavily in debt.[24] MGM was bought by Pathé Communications (led by Italian publishing magnate Giancarlo Parretti) in 1990, but Parretti lost control of Pathé and defaulted on the loans used to purchase the studio.[21][24] The French banking conglomerate Crédit Lyonnais, the studio's major creditor, then took control of MGM.[21][24][25] Even more deeply in debt, MGM was purchased by a joint venture between Kerkorian, producer Frank Mancuso, and Australia's Seven Network in 1996.[26]

Founding and early years

In 1924, movie theater magnate Marcus Loew had a problem. He had bought Metro Pictures Corporation in 1919 for a steady supply of films for his large Loew's Theatres chain. With Loew's lackluster assortment of Metro films, Loew purchased Goldwyn Pictures in 1924 to improve the quality. However, these purchases created a need for someone to oversee his new Hollywood operations, since longtime assistant Nicholas Schenck was needed in New York headquarters to oversee the 150 theaters. Approached by Louis B. Mayer, Loew addressed the situation by buying Louis B. Mayer Pictures on April 17, 1924. Mayer became head of the renamed Metro-Goldwyn-Mayer, with Irving Thalberg as head of production.[29][page needed]

MGM produced more than 100 feature films in its first two years. In 1925, MGM released the extravagant and successful Ben-Hur, taking a $4.7 million profit that year, its first full year.[29] Also in 1925, MGM, Paramount Pictures and UFA formed a joint German distributor, Parufamet.[30] When Samuel Goldwyn left he sued over the use of his name.[31]

Marcus Loew died in 1927, and control of Loew's passed to Nicholas Schenck. In 1929, William Fox of Fox Film Corporation bought the Loew family's holdings with Schenck's assent. Mayer and Thalberg disagreed with the decision. Mayer was active in the California Republican Party and used his political connections to persuade the Justice Department to delay final approval of the deal on antitrust grounds. During this time, in the summer of 1929, Fox was badly hurt in an automobile accident. By the time he recovered, the stock market crash in the fall of 1929 had nearly wiped Fox out and ended any chance of the Loew's merger going through. Schenck and Mayer had never gotten along (Mayer reportedly referred to his boss as "Mr. Skunk"),[32][page needed] and the abortive Fox merger increased the animosity between the two men.

MGM was one of the first studios to experiment with filming in Technicolor. Using the two-color Technicolor process then available, MGM filmed portions of The Uninvited Guest (Metro, 1924), The Big Parade (1925), and Ben–Hur (1925), among others, in the process. MGM released The Viking (1928), the first complete Technicolor feature with a synchronized score and sound effects, but no spoken dialogue.

MGM, however, was the very last studio to convert to "talkies" with its first all-color, "all-talking" sound feature with dialogue being the musical The Rogue Song (1930). MGM included a sequence made in Technicolor's superior new three-color process, a musical number in the otherwise black-and-white The Cat and the Fiddle (1934), starring Jeanette MacDonald and Ramon Novarro. The studio then produced a number of three-color short subjects including the musical La Fiesta de Santa Barbara (1935); their first complete feature in the process was Sweethearts (1938) with MacDonald and Nelson Eddy, the earlier of the popular singing team's two films in color. From then on, MGM regularly produced several films a year in Technicolor with Northwest Passage being one of the most notable.

In addition to a large short-subjects program of its own, MGM also released the shorts and features produced by Hal Roach Studios, including comedy shorts starring Laurel and Hardy, Our Gang and Charley Chase. MGM's distribution deal with Roach lasted from 1927 to 1938, and MGM benefited in particular from the success of the popular Laurel and Hardy films. In 1938, MGM purchased the rights to the Our Gang series and moved the production in-house,[33] continuing production of the successful series of children's comedies until 1944. From 1929 to 1931, MGM produced a series of comedy shorts called All Barkie Dogville Comedies, in which trained dogs were dressed up to parody contemporary films and were voiced by actors. One of the shorts, The Dogway Melody (1930), spoofed MGM's hit 1929 musical The Broadway Melody.

MGM entered the music industry by purchasing the "Big Three" starting with Miller Music Publishing Co. in 1934 then Robbins Music Corporation.[34] In 1935, MGM acquired a controlling interest in the capital stock of Leo Feist, Inc., the last of the "Big Three".[34] During the first musical craze of 1928-1930, a custom MGM label was created by Columbia using tunes from MGM productions that were recorded by Columbia. These records were sold only at Loew's theaters. (Columbia also created a label called Publix for Paramount music and sold only at Paramount Theaters.)

MGM produced approximately 50 pictures a year, though it never met its goal of releasing a new motion picture each and every week (it was only able to release one feature film every nine days). Loew's 153 theatres were mostly located in New York, the Northeast, and Deep South; Gone with the Wind (1939) had its world premiere at Loew's Grand Theatre in Atlanta, Georgia. A fine reputation was gained for lavish productions that were sophisticated and polished to cater to an urban audience. Still, as the Great Depression deepened, MGM began to economize by "recycling" existing sets, costumes, and furnishings from yesteryear projects. This recycling practice never let up once started. In addition, MGM saved money because it was the only one of the big five studios that did not own an off-site movie ranch. Until the mid-1950s, MGM could make a claim its rivals could not: it never lost money, although it did have an occasional disaster like Parnell (1937), Clark Gable's biggest flop. It was the only Hollywood studio that continued to pay dividends during the 1930s.

MGM stars dominated the box-office during the 1930s, and the studio was credited for inventing the Hollywood stable of stars system, as well. MGM contracted with the American Musical Academy of Arts Association to handle all of their press and artist development. The AMAAA's main function was to develop the budding stars and to make them appealing to the public. Stars such as Norma Shearer, Joan Crawford, Greta Garbo, Myrna Loy and Jeanette MacDonald reigned as the top-paid figures at the studio. Another MGM sex symbol actress, Jean Harlow, who had previously appeared in the Howard Hughes film Hell's Angels (1930), now had a big break and became one of MGM's most admired stars, as well. Despite Harlow's gain, Garbo still was a big star for MGM. Shearer was still a money maker despite screen appearances becoming scarce, and Crawford continued her box-office power until 1937. MGM also received a boost through the man who would become "King of Hollywood", Clark Gable. Gable's career took off to new heights after he won an Oscar for the Columbia film It Happened One Night (1934).

Mayer and Irving Thalberg's relationship began warmly, but eventually the two became estranged; Thalberg preferred literary works to the crowd-pleasers Mayer wanted. Thalberg, always physically frail, was removed as head of production in 1932. Mayer encouraged other staff producers, among them his son-in-law David O. Selznick, but no one seemed to have the sure touch of Thalberg. As Thalberg fell increasingly ill in 1936, Louis Mayer could now serve as his temporary replacement. Rumors began circulating that Thalberg was leaving to set up his own independent company;[citation needed] his early death in 1936, at age 37, cost MGM dearly.[29]

After Thalberg's untimely death, Mayer became head of production, as well as studio chief, becoming the first million-dollar executive in American history. The company remained profitable, although a change toward "series" pictures (Andy Hardy starring Mickey Rooney, Maisie starring Ann Sothern, Thin Man starring William Powell and Myrna Loy, et al.) is seen by some as evidence of Mayer's restored influence. Also playing a huge role was Ida Koverman, Mayer's secretary and right hand.[35]

In 1937, Mayer hired Mervyn LeRoy, a former Warner Bros. (WB) producer/director as MGM's top producer and Thalberg's replacement.[36] LeRoy talked Mayer into purchasing the rights to make a film version of the popular book The Wonderful Wizard of Oz, which MGM did on June 3, 1938, from Sam Goldwyn for $75,000.[37]

MGM in the 1940s

Within one year, beginning in 1942, Mayer released his five highest-paid actresses from their studio contracts: Joan Crawford, Norma Shearer, Greta Garbo, Myrna Loy and Jeanette MacDonald. After a two-year hiatus, Crawford moved to Warner Brothers, where her career took a dramatic upturn. Shearer and Garbo never made another film after leaving the lot. Of the five stars, Loy and MacDonald were the only two whom Mayer rehired, in 1947 and 1948 respectively.

Increasingly, before and during World War II, Mayer came to rely on his "College of Cardinals" — senior producers who controlled the studio's output. This management-by-committee resulted in MGM losing its momentum, developing few new stars and relying on the safety of sequels and bland material. (Dorothy Parker memorably referred to it as "Metro-Goldwyn-Merde."[39][page needed]) Production values remained high, and even "B" pictures carried a polish and gloss that made them expensive to mount. After 1940, production was cut from 50 pictures a year to a more manageable 25 features per year. During this time, MGM released very successful musicals with players such as Judy Garland, Fred Astaire, Gene Kelly, and Frank Sinatra.

MGM in the 1950s

Audiences began drifting to television in the late 1940s. MGM found it difficult to attract them to theaters. With its high overhead expenses, MGM's profit margins continued to decrease. Word came from Nicholas Schenck in New York: find "a new Thalberg" who could improve quality while paring costs. Mayer thought he had found this savior in Dore Schary, a writer and producer who had found success at running RKO. Top notch musicals were Schary's focus, with hits like Easter Parade and the various films of Mario Lanza (most famously, The Great Caruso) keeping MGM afloat.[29]

In August 1951, Mayer was fired by MGM's East Coast executives[40] and was replaced by Schary. Gradually cutting loose expensive contract players (including $6,000-a-week Judy Garland in 1950), saving money by recycling existing movie sets instead of building costly new scenery, and reworking pricey old costumes, Schary managed to keep the studio running much as it had through the early 1940s though his sensibilities for hard-edged, message movies would never bear much fruit. One bright spot was MGM musical pictures, under the aegis of producer Arthur Freed, who was operating what amounted to an independent unit within the studio. MGM produced some well-regarded and profitable musicals that would be later acknowledged as classics, among them An American in Paris (1951), Singin' in the Rain (1952), and Seven Brides for Seven Brothers (1954). However, Brigadoon (1954), Deep in My Heart (1954), It's Always Fair Weather (1955), and Invitation to the Dance (1956), were extravagant song and dance flops, and even the now-classic The Band Wagon (1953) lost money in its initial release. Movie audiences more and more were staying home and watching television.

In 1952, as a settlement of the government's restraint-of-trade action, United States v. Paramount Pictures, Inc. 334 US 131 (1948), Loews, Inc. gave up control of MGM.[29] It would take another five years before the interlocking arrangements were completely undone, by which time both Loews and MGM were sinking. Schary bowed out of MGM in 1956 in another power struggle against the New York-based executives.[41]

As the studio system faded in the late 1950s and 1960s, MGM's prestige faded with it. In 1957 (by coincidence, the year Mayer died), the studio lost money for the first time in its 34-year history.[29] Cost overruns and the failure of the big-budget epic Raintree County (1957) prompted the studio to release Schary from his contract. Schary's reign at MGM had been marked with few bona-fide hits, but his departure (along with the retirement of Schenck in 1955) left a power vacuum that would prove difficult to fill. Initially Joseph Vogel became president and Sol Siegel head of production. By 1960, MGM had released all of its contract players, with many either retiring or moving on to television.

MGM enters television

MGM's first television program, The MGM Parade, was produced by MGM's trailer department as one of the compilation and promotional shows that imitated Disney's series Disneyland[42] which was also on ABC. Parade was canceled by ABC in the 2nd quarter of 1956.[43] MGM took bids for its movie library in 1956 from Lou Chesler and others, but decided on entering the TV market itself. Chesler had offered $50 million for the film library.[43]MGM-TV was started with the hiring of Bud Barry to head up the operation in June 1956. MGM-TV was to distribute its films to TV (starting with the networks), TV production and purchasing TV stations. TV production was expect to start with the 1957-58 season and was to include half-hour remakes of or series based on its pictures. Initial feature film sales focused on selling to the networks.[43]

The year 1957 also marked the end of MGM's animation department, as the studio determined it could generate the same amount of revenue by reissuing older cartoons as it could by producing and releasing new ones.[44] William Hanna and Joseph Barbera, by then the heads of the MGM cartoon studio, took most of their unit and made their own company, Hanna-Barbera Productions, a successful producer of television animation.

In 1956, MGM sold the television rights for The Wizard of Oz to CBS, which scheduled it to be shown in November of that year. In a landmark event, the film became the first American theatrical fiction film to be shown complete in one evening on prime time television over a major American commercial network. (Olivier's version of Hamlet was shown on prime time network TV a month later, but split in half over two weeks, and the 1950 film, The Titan: Story of Michelangelo was telecast by ABC in 1952, but that was a documentary.) Beginning in 1959, and lasting until 1991, telecasts of The Wizard of Oz became an annual tradition, drawing huge audiences in homes all over the U.S. and earning additional profits for MGM. The studio was all too happy to see Oz become, through television, one of the two or three most famous films MGM has ever made, and one of the few films that nearly everybody in the U.S. has seen at least once. Today The Wizard of Oz is regularly shown on the Turner-owned channels, no longer just once a year.

MGM cartoons

In animation, MGM purchased the rights in 1930 to distribute a series of cartoons that starred a character named Flip the Frog, produced by Ub Iwerks. The first cartoon in this series (entitled Fiddlesticks) was the first sound cartoon to be produced in two-color Technicolor. In 1933, Ub Iwerks cancelled the unsuccessful Flip the Frog series and MGM began to distribute its second series of cartoons, starring a character named Willie Whopper, that was also produced by Ub Iwerks.[citation needed]

In 1934, after Iwerks' distribution contract expired, MGM contracted with animation producers/directors Hugh Harman and Rudolph Ising to produce a new series of color cartoons. Harman and Ising came to MGM after breaking ties with Leon Schlesinger and Warner Bros., and brought with them their popular Looney Tunes character, Bosko. These were known as Happy Harmonies, and in many ways resembled the Looney Tunes' sister series, Merrie Melodies. The Happy Harmonies regularly ran over budget, and MGM dismissed Harman-Ising in 1937 to start its own animation studio.[45]

Avery left the studio in 1953, leaving Hanna and Barbera to focus on the popular Tom and Jerry and Droopy series. After 1955, all cartoons were filmed in CinemaScope until MGM closed its cartoon division in 1957.[46]

During this period, MGM fell into a practice that would eventually sink the studio: an entire year's production schedule relied on the success of one big-budget epic each year.[citation needed] This policy began in 1959, when Ben–Hur was profitable enough to carry the studio through 1960. However, four succeeding big-budget epics — like Ben–Hur, each a remake — failed: Cimarron (1960), King of Kings (1961), Four Horsemen of the Apocalypse (1961), and, most notoriously, Mutiny on the Bounty (1962). The Cinerama film The Wonderful World of the Brothers Grimm (also 1962), the first film in Cinerama to actually tell a story, was also a flop. But one other epic that was a success, however, was the MGM-Cinerama co-production How the West Was Won (again 1962), with a huge all-star cast. King of Kings, while a commercial and critical flop at the time, has since come to be regarded as a film classic. The losses caused by these films led to the resignations of Sol Siegel and Joseph Vogel who were replaced by Robert M. Weitman (head of production) and Robert O'Brien (president).

The combination of O'Brien and Weitman seemed to temporarily revive the studio. MGM released David Lean's immensely popular Doctor Zhivago (1965),[48] later followed by such hits as The Dirty Dozen (1967) and 2001: A Space Odyssey (1968). However the company's time was taken up fighting off proxy attacks by corporate raiders, and then MGM backed another series of flops, including Ryan's Daughter (1970). Weitman moved over to Columbia in 1967 and O'Brien was forced to resign a few years later.

Enter Kirk Kerkorian

In 1969, Kirk Kerkorian purchased 40 percent of MGM from Bronfman and Time, Inc.,[20][page needed] What appealed to Kerkorian was MGM's Culver City real estate, and the value of 45 years' worth of glamour associated with the name, which he attached to a Las Vegas hotel and casino. As for film-making, that part of the company was quickly and severely downsized under the supervision of James T. Aubrey Jr. With changes in its business model including fewer pictures per year, more location shooting and more distribution of independent productions, MGM's operations were reduced. Aubrey sold off MGM's accumulation of props, furnishings and historical memorabilia, including a pair of Dorothy's ruby slippers from The Wizard of Oz. Lot 3, 40 acres (160,000 m2) of back-lot property, was sold off for real-estate development. In 1971, it was announced that MGM was in talks with 20th Century Fox about a possible merger, a plan which never came into fruition.[6] Under Aubrey, MGM also sold off MGM Records and its overseas theater holdings.[29]

Through the 1970s, studio output slowed considerably as Aubrey preferred four or five medium-budget pictures each year along with a smattering of low-budget fare.[29] In October 1973 and in decline in output, MGM closed MGM's distribution offices then outsourced distribution for its library for a ten-year period along with selling its music publishing arm, Robbins, Feist & Miller plus half of Quality Records of Canada, to United Artists.[29][53]

Kerkorian now distanced himself from the operations of the studio, focusing on MGM Grand Hotel by investing $120 million.[29] Another portion of the backlot was sold in 1974. The last shooting done on the backlot was the introductory material for That's Entertainment! (1974), a retrospective documentary that became a surprise hit for the studio.

That's Entertainment! was authorized by Dan Melnick, who was appointed head of production in 1972. Under Melnick's regime, MGM made a number of successful films, including Westworld (1973), Soylent Green (1973), The Sunshine Boys (1975), and Network (1976), which the studio co-produced with United Artists. However, MGM never reclaimed its former status.

The MGM Recording Studios were sold in 1975. In 1979, Kerkorian declared that MGM was now primarily a hotel company. The company hit a symbolic low point in 1980 when David Begelman, earlier let go by Columbia following the discovery of his acts of forgery and embezzlement, was installed as MGM's President and CEO.

In 1980, Metro-Goldwyn-Mayer, Inc. split its production and casino units into separate companies: Metro-Goldwyn-Mayer Film Co. and MGM Grand Hotels, Inc.[54] The rise of ancillary markets was enough to allow MGM Film Co. to increase production to 10-15 films a year compared to three to six in the previous decade, but first it needed its own distribution unit.

MGM/UA Entertainment

MGM proceeded to return to theatrical distribution in 1981 with its purchase of United Artists, as UA's parent company Transamerica Corporation decided to sever its link with the studio following the failure of Heaven's Gate.[21][24][page needed] Because of this, Metro-Goldwyn-Mayer Film Co. was renamed "MGM/UA Entertainment Company."[29]

WarGames and Octopussy (both 1983) were MGM/UA's only early 1980s hits, but did not push MGM into the profit range that Kerkorian wanted. MGM/UA formed a trio of subsidiaries, the MGM/UA Home Entertainment Group, MGM/UA Classics, and the MGM/UA Television Group in 1982. Kerkorian offered to purchase the remaining outstanding MGM shares he did not own to take the company private but was met with resistance.[29]

After the purchase of United Artists, David Begelman's duties were transferred to that unit. Under Begelman, MGM/UA produced a number of unsuccessful films, and he was fired in July 1982. Out of the 11 films he put into production, by the time of his release from the studio, only one film, Poltergeist (1982), proved to be a clear hit.[55] Not even MGM's greatest asset - its library - was enough to keep the studio afloat.[54] After 1982, the studio relied more on distribution, picking up independent productions, rather than financing their own projects.[54]

MGM Entertainment

The MGM sign being dismantled once Lorimar took control of the studio lot

On August 7, 1985, Turner Broadcasting System offered to buy MGM/UA. As film licensing to television became more complicated, Ted Turner saw the value of acquiring MGM's film library for his SuperstationWTBS.[54] On March 25 of the following year, the deal was finalized in a cash-stock deal for $1.5 billion,[24][54][56][page needed] and the company was renamed "MGM Entertainment Co.".[57][58] Turner immediately sold MGM's United Artists subsidiary back to Kerkorian for roughly $480 million.[24][56] But since they were quite unable to find financing for the rest of the deal, and because of these concerns in the financial community over the debt-load of his companies on August 26, 1986, Turner was forced to sell MGM's production and distribution assets to United Artists for $300 million.[24][56][59][60] The MGM lot and lab facilities were sold to Lorimar-Telepictures.[59] Turner kept the pre-May 1986 library of MGM films, along with the RKO Radio Pictures and pre-1950 Warner Bros. films which United Artists had previously purchased.[59]

How much of MGM's back catalog Turner actually obtained was a point of conflict for a time; eventually, it was determined that Turner owned all of the pre-May 1986 MGM library, as well as the pre-1950 Warner Bros. catalog,[61][62][note 1] the Popeye cartoons released by Paramount (both the pre-1950 WB library and Popeye cartoons were sold to Associated Artists Productions, which was later bought by United Artists), and the US/Canadian rights to the RKO library, in addition to MGM's television series. Turner began broadcasting MGM films through his Turner Network Television.

MGM/UA Communications

After Kerkorian reclaimed MGM in August 1986, the MGM/UA name continued to be used, but the company changed its name, this time to MGM/UA Communications Co., now using MGM and UA as separate brands.[63]

In July 1988, Kerkorian announced plans to split MGM and UA into separate studios. Under this deal, Kerkorian, who owned 82% of MGM/UA Communications, would have sold 25% of MGM to Barris Industries (controlled by producers Burt Sugarman, Jon Peters, and Peter Guber).[64] The proposition to spin off MGM was called off a few weeks later.[65] In 1989, Australian-based Qintex attempted to buy MGM from Kerkorian, but the deal collapsed.[66] On November 29, 1989, Turner (owners of the pre-May 1986 MGM library) attempted to buy Tracinda's entertainment assets such as MGM/UA Communications Co. but every time the deal had failed.[67]

MGM-Pathé Communications

In 1990, Italian financier Giancarlo Parretti announced he was about to buy MGM/UA. Although the French government had scuttled Parretti's bid to buy Pathé due to concerns about his character, background, and past dealings, Parretti gained backing from Crédit Lyonnais and bought MGM/UA from Kirk Kerkorian. To finance the purchase, Parretti licensed the MGM/UA library to Time Warner for home video and Turner for domestic television rights[54] until 2003.[68] He then merged it with his Pathé Communications Corporation (formerly Cannon Group, a distributor that Parretti had renamed before his aborted bid for Pathé) to form MGM–Pathe Communications Co. The well-respected executive, Alan Ladd Jr., a former president of MGM/UA, was brought on board as CEO of MGM in 1991. However, a year later, Parretti's ownership of MGM–Pathé dissolved in a flurry of lawsuits and a default by Crédit Lyonnais, and Parretti faced securities-fraud charges in the United States and Europe.

On the verge of bankruptcy and failure, Crédit Lyonnais took full control of MGM–Pathé via loan default in mid-1992 and converted its name back to Metro-Goldwyn-Mayer. The bank fired Ladd and replaced him with former Paramount executive Frank Mancuso Sr. Mancuso then hired Michael Marcus as chairman, MGM Pictures and former Warner Bros. executive John Calley as United Artists head. A television production division was started up.[69] As part of his exit package, Ladd took some of the top properties, including Braveheart.

On December 21, 1992, MGM's 15% investment ($30 million in cash) in Carolco plus a $30 million convertible note was approved by Carolco's board. MGM would also start distributing Carolco's films in January 1994 after its deal with TriStar Pictures ends. While MGM had to convince parent Credit Lyonnais to allow the deal, Lyonnais was Carolco's main lender thus allowing the bank to collect outstanding debts and extend a new line of credit.[70]

MGM Holdings, Inc. was formed to take on about $1 billion in MGM's liabilities off MGM's balance sheet in the third quarter of 1993. Credit Lyonnais extended a $400 million line of credit allowing a Chemical Bank lead bank group to extend a $350 million line of credit in 1994. In 1994, MGM had a hit in Stargate.[69]

In May 1995, MGM agreed to distribution four of Rysher Entertainment's films in 1996 and 1997 and co-produce and co-finance two or three in that same period.[71]

Metro-Goldwyn-Mayer Pictures

Because of the way it had acquired control of the company, Crédit Lyonnais soon put the studio up for sale, with the highest bidder being Kirk Kerkorian. Now the owner of MGM for the third time, Kerkorian's deal with Mancuso quickly angered John Calley, who quit United Artists and was named head of Sony Pictures Entertainment. By selling a portion of the studio to Australia's Seven Network, Kerkorian was able to convince Wall Street that a revived MGM was worthy of a place on the stock market, where it languished until he sold the company to a group of hedge funds tied to Sony, which wanted to control the studio library to promote the Blu-ray Disc format.

In December 1997, MGM attempted to purchase 1,000 films held by Consortium de Réalisation, but was outbid by PolyGram.[78] However, they ultimately succeeded when they acquired the 2/3 of pre-1996 PolyGram Filmed Entertainment library from Seagram in 1999 for $250 million, increasing their library holdings to 4000. Prior to that, MGM had held a home video license for 100 of the films since spring 1997.[79][80] The PolyGram libraries were purchased by its Orion Pictures subsidiary so as to avoid its 1990 video distribution agreement with Warner.[68] The studio also obtained the broadcast rights to more than 800 of its films previously licensed to Turner Broadcasting.[81][82]

By 1998, MGM had started a specialty film unit using The Samuel Goldwyn Company under the Goldwyn Films name. Samuel Goldwyn Jr. sued Metromedia over salary and damages when he work at Goldwyn Company under Metromedia, and sued MGM over the use of the Goldwyn name claiming trademark infringement and unfair competition. MGM and Metromedia settled on January 10, 1999 with MGM's Goldwyn Films changing its name to G2 Films.[31]

MGM Holdings

Bidding war and corporate reorganization

In 2004, many of MGM's competitors started to make bids to purchase the studio, beginning with Time Warner. It was not unexpected that Time Warner would bid, since the largest shareholder in the company was Ted Turner. His Turner Entertainment Group had risen to success in part through its ownership of the pre-May 1986 MGM library. After a short period of negotiation with MGM, Time Warner was unsuccessful. The leading bidder proved to be Sony Corporation of America, backed by Comcast and private equity firms Texas Pacific Group (now TPG Capital, L.P.), DLJ and Providence Equity Partners. Sony's primary goal was to ensure Blu-ray Disc support at MGM; cost synergies with Sony Pictures Entertainment were secondary. Time Warner made a counter-bid (which Ted Turner reportedly tried to block), but on September 13, 2004, Sony increased its bid of US$11.25/share (roughly $4.7 billion) to $12/share ($5 billion), and Time Warner subsequently withdrew its bid of $11/share ($4.5 billion). MGM and Sony agreed on a purchase price of nearly $5 billion, of which about $2 billion was to pay off MGM debt.[88][89] From 2005 to 2006, the Columbia TriStar Motion Picture Group domestically distributed films by MGM and UA.

In 2006, MGM announced it would return as a theatrical distribution company. MGM struck deals with The Weinstein Company, Lakeshore Entertainment, Bauer Martinez, and many other independent studios, and then announced its plans to release 14 feature films for 2006 and early 2007. MGM also hoped to increase the amount to over 20 by 2007. Lucky Number Slevin, released April 7, was the first film released under the new MGM era.[citation needed] The Weinstein distribution agreement covered three years and got Weinstein films, but was ended three month early.[90]

MGM also announced plans to restructure its worldwide television distribution operation.[93] In addition, MGM signed a deal with New Line Television in which MGM would handle New Line's U.S. film and series television syndication packages. MGM served as New Line's barter sales representative in the television arena until 2008.[94]

A tentative agreement was signed in Seoul on March 15, 2006, between MGM, South Korea-based entertainment agency Glovit and Busan city official for a theme park schedule to open in 2011. MGM Studio City was project to cost $1.02 billion build on 245 acres owned by the city in planned tourist district and contain 27 attractions, a film academy with movie sets, hotels, restaurants and shopping facilities. Glovit was expected to find funding and oversee management of the park, while MGM received a licensing agreement making them handle content and overall planning and the option to buy a 5%-10% share.[95]

On November 2, 2006, producer/actor Tom Cruise and his production partner, Paula Wagner, signed an agreement with MGM to run United Artists. Wagner will serve as United Artists' chief executive.[96][97] Cruise will produce and star in films for UA, and MGM will distribute the movies.[98]

MGM in the digital age

Over the next several years, MGM launched a number of initiatives in distribution and the use of new technology and media, as well as joint ventures to promote and sell its products. In April 2007, it was announced that MGM movies would be able to be downloaded through Apple's iTunes service, with MGM bringing an estimated 100 of its existing movies to iTunes service, the California-based computer company revealed. The list of movies included the likes of modern features such as Rocky, Ronin, Mad Max, and Dances with Wolves, along with more golden-era classics such as Lilies of the Field and The Great Train Robbery.[99] In October, the company launched MGM HD on DirecTV, offering a library of movies formatted in Hi Def.[100] Also in 2006, MGM licensed its home video distribution rights for countries outside of the United States to 20th Century Fox.[citation needed] MGM teamed up with Weigel Broadcasting to launch a new channel titled This TV on November 1, 2008.[101][102] On August 12, 2008, MGM teamed up with Comcast to launch a new video-on-demand network titled Impact.[103] On November 10, 2008, MGM announced that it will release full-length films on YouTube.[104]

On April 14, 2008, a South Korea government agency announced that MGM and Incheon International Airport Corporation agreed to build MGM Studio Theme Park. The selected site was a 1.5 million square meter Yeongjongdo island property near the Incheon International Airport.[105] However, the park was designed but never built.[106]

MGM files for bankruptcy

As of mid-2009, MGM had US$3.7 billion in debt, and interest payments alone totaled $250 million a year.[107][108][109] MGM earns approximately $500 million a year on income from its extensive film and television library, but the economic recession is reported to have reduced this income substantially.[110][111]

Whether MGM could avoid voluntary or involuntary bankruptcy had been a topic of much discussion in the film industry. MGM had to repay a $250-million line of credit in April 2010, a $1-billion loan in June 2011, and its remaining US$2.7 billion in loans in 2012.[110] In May 2009, MGM's auditor gave the company a clean bill of health, concluding it was still on track to meet its debt obligations.[108] At that time, the company was negotiating with its creditors to either extend the debt repayment deadlines or engage in a debt-for-equity swap.[108] Industry observers, however, questioned whether MGM could avoid a Chapter-11 bankruptcy filing under any circumstances, and concluded that any failure to conclude the negotiations must trigger a filing.[112] MGM and its United Artists subsidiary were now producing very few films each year, and it was widely believed that MGM's solvency would depend on the box-office performance of these films (especially Skyfall).[110][113] There was some indication that Relativity Media and its financial backer, Elliott Associates (a hedge fund based in New York), had been acquiring MGM debt in an attempt to force the company into involuntary bankruptcy.[107][114][115]

On August 17, 2009, chief executive officer Harry E. Sloan stepped down and MGM hired Stephen F. Cooper as its new CEO,[7][116][117] a corporate executive who guided Enron through its post-2001 bankruptcy and oversaw the restructuring and growth of Krispy Kreme in 2005.[110][118][119] Expectations were that Cooper was hired to act quickly on MGM's debt problems.[110][118] On October 1, 2009, the studio's new leadership negotiated a forbearance agreement with its creditors under which interest payments due from September to November 2009 did not have to be paid until December 15, 2009.[120]

MGM stated in February 2010 that the studio would likely be sold in the next four months, and that its latest film, Hot Tub Time Machine, might be one of the last four films to bear the MGM name. However, some stated that the company might continue as a label for new James Bond productions, as well as other movie properties culled from the MGM library.[121][122]

MGM Holdings, Metro-Goldwyn-Mayer and 160 affiliates filed for Chapter 11 bankruptcy on November 3, 2010, with a prepackaged plan for exiting bankruptcy which led to MGM's creditors taking over the company.[123] On December 20, 2010, MGM executives announced that the studio had emerged from bankruptcy. Spyglass Entertainment executives Gary Barber and Roger Birnbaum became co-Chairs and co-CEOs of the studio.[124][125]

Post-bankruptcy era

On January 4, 2011, MGM and Weigel Broadcasting announced plans to distribute MeTV nationwide.[126][127] On February 2, 2011, MGM named Jonathan Glickman to be the film president of MGM. Six days later, MGM was finalizing a distribution deal with Sony Pictures Entertainment to handle distribution of its 4,000 films and DVDs worldwide and on digital platforms, including the two upcoming Bond films: Skyfall and Spectre. There were four studios who were bidding on the Bond distribution rights: Paramount Pictures, Warner Bros. Pictures, 20th Century Fox, and Columbia Pictures. Paramount was the first studio who dropped out of the Bond bidding. The deal was finalized on April 13, 2011. Post-bankruptcy, MGM also co-financed SPE's The Girl with the Dragon Tattoo. 20th Century Fox's deal with MGM handling its library distribution worldwide was set to expire in September 2011.[10][11] However, the deal was renewed and extended on April 14, 2011[128][129] and, after five years, was renewed and extended again on June 27, 2016. It will expire in June 2020.[130]

MGM moved forward with several upcoming projects, including remakes of RoboCop and Poltergeist,[131][132] and released their first post-bankruptcy film Zookeeper, which was co-distributed by Columbia Pictures on July 8, 2011. The new MGM, under Barber and Birnbaum's control, focuses on co-investing on films made by another party, which handle all distribution and marketing for the projects. MGM handles international television distribution rights for the new films as well as its library of existing titles and also retains its in-house production service.[133] In separate 2011 deals, the rights to MGM's completed films Red Dawn and The Cabin in the Woods were dealt to FilmDistrict as well as Lionsgate Films, respectively.[134][135]

On October 3, 2012, Birnbaum announced his intention to exit his role as an MGM executive and return to "hands-on" producing. He will remain with the studio to produce films on "an exclusive basis".[136] In May 2014, MGM introduced The Works, a channel available in 31 percent of the country, including stations owned by Titan Broadcast Management.[137]

In 2013 the Orion brand was revived as a TV production label for a syndicated court show. Orion Pictures name was extended in fourth quarter 2014 for smaller domestic and international video on demand and limited theatrical releases.[138]

In March 2017, MGM announced a multi-year distribution deal with Annapurna Pictures for some international markets and including home entertainment, theatrical and television rights.[139] Later on October 31, 2017, the two companies formed a US distribution joint venture. However, this partnership will not be exclusive to all MGM films, as several of them will continue to be released through existing studio partners, such as Warner Bros. and Paramount. It also does not include newly relaunched Orion Pictures.[140] On February 5, 2019, Annapurna and MGM rebranded and expanded their US distribution joint venture as United Artists Releasing, marking another revival of the United Artists brand, with the Orion Pictures distribution team and films joining the venture. The decision was made to coincide with the UA brand's 100th anniversary.[141]

Following the Harvey Weinstein sexual abuse allegations in October 2017, MGM was listed as one of 22 potential buyers interest in acquiring The Weinstein Company.[142] In October 2017, MGM's board renewed Gary Barber's contract as chairman and CEO until December 2022. In February 2018, Chris Brearton, the former media M&A attorney of Latham and Watkins, was appointed as chief operating officer. On March 19, 2018, MGM Holdings announced that Barber had been fired by the studio's board of directors. MGM gave no reason for his firing. For the interim, the company would be led by the newly formed "Office of the CEO".[143]

In April 2019, MGM signed a two-year, first look deal for films with Smokehouse Pictures, owned by George Clooney and Grant Heslov. The deal's first film is an unnamed John DeLorean film based on journalist Alex Pappademas’ Epic magazine article “Saint John”, written by Keith Bunin and Clooney as director with a possibility of starring.[144]

Headquarters

Since August 22, 2011, its headquarters have been in Beverly Hills, California.[145] MGM rents space in a six-story office building. The 144,000-square-foot (13,400 m2) facility was originally constructed for the venerable William Morristalent agency, but had remained all but unoccupied until MGM's move because of the agency's merger with Endeavor Talent Agency in April 2009. MGM planned to house a private theater and a private outdoor patio in the building.[146]

Prior to 2003, its headquarters had been in the Colorado Center in Santa Monica, California,[147][148] occupying at least 150,000 square feet (14,000 m2) of space there. In 2000 MGM announced that it was moving its headquarters to a new building in Century City that was to be the first high-rise in Los Angeles to be completed in the 21st century. Upon the company's agreement to be its lead tenant halfway through the design building process, the structure became identified as the MGM Tower,[149] opening in 2003.[146] When MGM moved into the lavishly appointed spaces[147] devised by Alex Yemenidjian, former chairperson and chief executive of MGM, Roger Vincent and Claudia Eller observed in the Los Angeles Times that "Yemenidjian spared no expense in building out the studio's space with such Las Vegas-style flourishes as towering marble pillars and a grand spiral staircase lined with a wall of awards."[146]

Scott Johnson, the architect, designed the bottom third of the tower with extra-large floors so MGM executives could have outdoor decks. Seemingly no expense was spared, from the marble imported from Italy for MGM's area to the company's exclusive use of a dedicated private garage, security checkpoint, and elevator bank: all to enable celebrities who visited the complex discreet entry and exit, bypassing public spaces. One of three screening rooms placed in the tower was a 100-seat theater on the ground floor (later taken over by International Creative Management in December 2010). The 14th floor lobby housed the executive suites and a wall of Oscar statuettes for Academy Award-winning films. The street leading to the building's garage was renamed MGM Drive and a large MGM logo, illuminated at night, crowned the top of the building. As of December 2010, MGM rented 200,000-square-foot (19,000 m2) of space in the MGM Tower at a cost of almost $5 per square foot per month.[146]

Emerging from bankruptcy protection in 2010, MGM announced that it planned to relocate the headquarters to Beverly Hills as part of an effort toward removing almost $5 billion in debt since the lease in Century City was not scheduled to expire until 2018. Vincent and Eller said that MGM's per square foot monthly rent would be far lower in the Beverly Hills building than in the MGM Tower. Larry Kozmont, a real estate consultant not involved in the process, said "It's a prudent move for them. Downsizing and relocating to a space that is still prominent but not overly ostentatious and burdened by expenses is fundamental for their survival."[146] MGM vacated its namesake tower on August 19, 2011.[145]

The MGM library

Turner Entertainment Co.

Following his brief ownership of the company in 1986, Ted Turner formed Turner Entertainment Co. as a holding company for the pre-May 1986 MGM film and television library, which he retained.[168] After Turner's holdings were purchased by Time Warner in 1996,[169] they ultimately became integrated into the Warner Bros. library,[170] though the copyright claimant to these titles is still "Turner Entertainment Co." For some time after the sale, MGM continued to handle home video distribution of its pre-May 1986 film and TV library and began to handle home video distribution of the pre-1950 Warner Bros. films; those rights were reassigned to Warner Home Video in 1999.[171]

Acquired libraries

Through its acquisitions of many different companies and film and television libraries, Metro-Goldwyn-Mayer has greatly enhanced its film and television holdings. As of 1998, MGM owned the rights to 5,200 films.[68]

Metro-Goldwyn-Mayer's library includes its own post-April 1986 library as well as the film and television libraries of:

Distribution

From 1924 to 1973 (worldwide) and 1981 to 2010 (domestically), MGM has theatrically distributed most of its movies entirely in-house, as well as those of United Artists after July 1981 and Orion Pictures after April 1997. In October 2017, seven years after shutting down their major distribution operations, MGM re-entered US threatrical distribution by launching an American joint venture with Annapurna Pictures that will share distribution financing between the two companies and release certain MGM and Annapurna films, beginning with the 2018 remake of Death Wish.

There were also periods when they outsourced distribution to other companies. From 1973 to 1981, United Artists released its films in North America while Cinema International Corporation released them overseas. In 1981, United Artists' international arm was combined by CIC to form United International Pictures. MGM's arrangement with that company lasted until 2000, when it made an arrangement with 20th Century Fox for international distribution. From 2005 to 2016, the Columbia TriStar Motion Picture Group has distributed certain films. From 2006 to 2010, Alliance Films handled Canadian distribution of some of its products.

From 2006 to September 2008, MGM distributed The Weinstein Company's (TWC) film. Weinstein preferred the deal brought carriage on Showtime. Prints and marketing were paid for by TWC, while MGM was paid for booking theaters. With TWC agreed to a direct deal with Showtime and MGM not intending to renew the distribution deal, TWC and MGM agreed to ended the distribution deal three month early in September 2008.[90]

Other international arrangements

In 2012, MGM signed a deal with Forum Film to release its films in Poland, Hungary, Romania, Bulgaria and Israel; Forum Film has also been known to release some of MGM's films in Czech Republic/Slovakia. That same year, in Denmark, Sweden and Norway, MGM arranged to get its films distributed through AB Svensk Filmindustri,[183] which was renamed to SF Studios in 2016. Also in 2012, it arranged to have its films distributed by FS Film[184] (now SF Film Finland) to release its films in Finland and with ZON Lusomundo[185] (now NOS Audiovisuais) to release its films in Portugal.

In 2018, for select films, MGM made international distribution deals with Entertainment One (for the Canadian market), Vertigo Releasing (for the UK market), Rialto Distribution (for the Australian market), Ascot Elite Entertainment Group (for the Swiss market), BF Distribution (for the Argentinean market), Dutch FilmWorks (for the Dutch market), Kinepolis Film Distribution (for the Belgian film market), Odeon (for the Greek market), OctoArts Films (for the Filipino market), Universum Film (for the German market), Filmax International (for the Spanish market), Hollywood International Film Exchange/Big Screen Entertainment Group (for the Chinese market), Shaw Organisation (for the Singaporean market), and Showgate (for the Japanese market).[186][187][188]Paramount Pictures distributed the 2018 remake of Death Wish for the French market.[186][187][188]